Kuala Lumpur: ASEAN countries must unite and strengthen cooperation in advancing technology and meeting product requirements to reduce dependence on imports from the United States (US). Senior lecturer at the Economics Division of the School of Social Sciences, Universiti Sains Malaysia, Dr Abdul Rais Abdul Latiff, said this is one of the proposals that could be considered following the recent announcement of new tariff rates by US President Donald Trump.
According to BERNAMA News Agency, with the new rates, the cost of several imported products, particularly in the manufacturing sector such as electronic chips and vehicle engines, will increase due to the current lack of local production capacity. This is expected to have an impact. However, exploring alternative approaches, such as collaboration among ASEAN countries, could prevent significant price hikes. ASEAN nations are, in fact, on par with the US in certain areas, enabling them to ramp up production of these goods.
He added that Malaysia could explore sourcing alternatives from other countries to reduce reliance on the US, thereby helping to mitigate rising costs. Enhancing technological capabilities to produce these products domestically could eventually allow Malaysia to export them to other ASEAN countries.
Abdul Rais noted that the global economy is currently experiencing a ‘tariff war’ and that the US remains a major trading partner for Malaysia. A reassessment of trade agreements with the US may be necessary while strengthening agreements among ASEAN countries is crucial to foster regional cooperation and defend economic interests.
Meanwhile, the Federation of Malaysian Manufacturers Penang chairman Datuk Seri Lee Teong Li described the US decision as particularly concerning given Malaysia’s strong trade ties with the US and its longstanding commitment to open and fair trade. While some product categories are exempt from the US Reciprocal Tariff, most Malaysian exports to the US will be affected.
The affected sectors will now face the full 24 per cent tariff, potentially leading to a significant drop in export volumes, job pressures within impacted industries, and the rerouting or restructuring of supply chains involving Malaysian producers and US-linked multinational operations based in Malaysia. The broader ecosystem, including suppliers, logistics providers, and downstream service sectors, may also suffer as shifts in sourcing and manufacturing decisions result from the tariffs.
Lee highlighted that while Malaysia’s 24 per cent tariff rate is relatively lower compared to some of its ASEAN neighbours, it still places the country in a punitive category, signalling increased scrutiny of regional economies. Malaysia competes with and complements its regional peers in sectors like electronics, rubber-based products, and machinery, and plays a complementary role in integrated supply chains, such as semiconductors and industrial components.
Looking ahead, Lee underscored the importance of long-term resilience through both external market diversification and robust domestic policies. He warned that Malaysian exporters are likely to face mounting pressure from US importers to lower their export prices to absorb the 24 per cent tariff, thereby squeezing profit margins.
Additionally, he noted that countries significantly affected by the US tariffs may begin diverting their products to Malaysia and the broader ASEAN region, potentially leading to a surge in cheaper imports. This could result in unfair competition for local industries if not closely monitored and addressed through appropriate safeguards.